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Here's the problem. Nobody wants to buy mortgage backed securities right now. That doesn't mean 100% of the mortgages in those mortgage backed securities are or will ever go into default. Right now only about 4% are in foreclosure. It also doesn't mean the actual houses backing those mortgages all burned to the ground and the land they sit on is poisoned. These are not worthless assets but without anybody buying they look like it. If we continue to force these institutions to value mortgage backed securities based on what they can get for them right now (mark to market) we are basically saying that your house and your equity in your house are worth nothing because the guy down the street lost his house to foreclosure. Chances are you if you want to sell your house right now you can't. It's not because it's worth nothing it's because prospective buyers can't get a mortgage. The same goes for those mortgage backed securities. If the government buys those securities for pennies on the dollar we taxpayers might get a real bargain. It'll also make the banks' balance sheets look better for awhile. But it won't solve the credit problem because it won't provide enough recapitalization for those banks. They still won't have money to lend and the credit crisis is what is killing us. Wheat farmers can't wait til you buy that box of Wheaties to get paid. Chavez and Saudi sheiks won't wait til you fill up your tank at the pump to get paid. Your county can't wait til you pay your taxes to fill pot holes. The whole economy runs on credit and if there is none, well good luck saving up enough cash to buy a car or a house for starters. Sure we ought to punish those who put us in this position. And we ought to pass and enforce laws to make sure they never can again. But in the meantime we can't destroy the world's economic system. These guys may have lost trillions but that doesn't mean they have those trillions. Those paper profits are gone. If the delicate little flowers of the GOP House caucus can't handle honest criticism by Pelosi or anyone else they ought to find new jobs where the truth doesn't seem to matter much, like Wall St or John McCain's campaign staff. This mess is the result of government inaction and lack of oversight. Deregulation over the last 28 years fostered by the Republican party brought us to where we are today.

About Ray Hanania

Ray Hanania is an award winning columnist and former Chicago City Hall Reporter (1976-1992) covering "Daley to Daley." He writes a syndicated column distributed by Creators Syndicate and published every Week by the Jerusalem Post, and a political column on Chicagoland and mainstream American political issues each week in several regional community newspapers. He is a political consultant and president of Urban Strategies Group and he offers his personal insights and experiences about regional and national politics atwww.Hanania.com. This is an Opinion Commentary-based news and information web site. We publish opinion columns, cartoons, comic strips, news stories, feature stories and, occasionally, local press releases of interest to the general public in our target market area. Email Ray Hanania (rayhanania@comcast.net) with any information, corrections or clarifications. This blog only represents the views of Ray Hanania and no one else, unless specifically stated.